By Phiwa Sikhondze
The critical state of Eswatini’s infrastructure demands an urgent, collaborative, and innovative approach to financing and investment.
This was the consensus during the recent panel discussion on the “Importance of Public Infrastructure Financing and Investment: The Roles of National Government, Local Governments, developers, and the Private Sector,” led by the CEO of the Eswatini Housing Board, Mduduzi Dlamini at the Eswatini National Urban Forum.
Dlamini, along with infrastructure and local government representatives, underscored the pressing need for affordable, sustainable, and comprehensive infrastructure upgrades across the country.
Dlamini explained that physical assets, from roads to utilities, housing, and connectivity infrastructure, are the backbone of our economy and social services.
“Our economy is at a breaking point. Service delivery complaints and national outcries over living conditions reflect the urgent need for investment in infrastructure,” he added, noting that outdated facilities, such as government offices and housing, need immediate attention.
Nomvuyo Hlophe, Managing Director of VIP Property Planning Consultants, supported Dlamini’s concerns, noting that municipalities currently depend heavily on limited revenue sources, primarily property rates, government subventions, and user fees.
She said this financial structure significantly restricts their ability to fund essential infrastructure projects. For example, she noted that 80% of municipal revenue comes from property rates and taxes, while government subventions make up a mere 10%. With the remaining 9% derived from user fees, municipalities are left struggling to finance large-scale projects, often resulting in delayed or shelved development.
“Municipalities cannot realize their infrastructure goals solely on these funding models. They need to explore external financing sources—what we call other people’s money through Public-Private Partnerships (PPPs),” Hlophe said.
She emphasized that tapping into external funding would be a sustainable solution if Eswatini’s PPP policy, established in 2017, could be adapted for implementation at the local level. According to Hlophe, this policy remains largely theoretical and ineffective in practice, particularly for large-scale projects.
One recent example highlighted by Hlophe involves an international investor who expressed interest in building a regional hospital. However, the project fell through due to regulatory roadblocks, including the requirement for a sovereign guarantee.
Eswatini’s regulations were not ready to accommodate such an investment, Hlophe said. The government must address these issues to make large-scale investments feasible, particularly in essential sectors like healthcare and infrastructure.
Hlophe also underscored the need for national policies to be more flexible to facilitate investment at the municipal level.
“Current regulations do not connect well between the national and local levels, creating a disconnect that impedes development, she explained.”
Meanwhile, Muzikayise Masina: Director Technical Services at the Municipal Council of Mbabane, echoed these sentiments and pointed out the significance of roads as the arteries of economic activity.
“Urban centers are the heart of Eswatini’s economy. Without investment in roads and other essential infrastructure, our cities won’t be able to support economic growth, Masina stated. He called for creative financing solutions, including impact fees for developers, fuel levies, and even crowd funding for specific local projects.
The disrepair of existing infrastructure, particularly roads, highlights the consequences of insufficient maintenance budgets. According to Vincent Dlamini: Chief Roads Engineer at the Ministry of Public Works and Transport, who was also a panelist, the national government has prioritized constructing new infrastructure over maintaining the old, leading to widespread degradation.
“We sacrificed maintenance to build new roads, and now both the old and new roads are deteriorating. This has a significant impact on our economy, he warned, citing a U.S. study that projected every dollar spent on infrastructure maintenance could save multiple dollars in avoided future costs.
Lomkhosi Alabi, Head of Client Coverage and Transactional Banking at Standard Bank, provided critical insights from a financial sector perspective during the discussion.
She emphasized the critical importance of infrastructure projects, especially in power generation, as Eswatini heavily relies on imported power. She noted delays in project implementation, often due to funding constraints and the need for feasibility studies.
While the government plays a key role in funding, Alabi stressed the necessity for collaboration with private sector players and external partners, such as commercial banks, through public-private partnerships (PPPs). However, she highlighted that many infrastructure projects require significant investments beyond the capacity of a single bank, making partnerships with development finance institutions (DFIs) essential.
Alabi also pointed out the growing focus on sustainability and environmental considerations in project funding, urging that long-term impacts must be factored into financing decisions.
The panel agreed that addressing Eswatini’s infrastructure needs requires a cohesive strategy that involves the national government, municipalities, private developers, and the local communities themselves. Critical steps identified included modernizing the legislative framework, creating a lifecycle management plan for all infrastructure, and ensuring data-informed investment decisions.